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WTF is wrong with agencies?

[This post was first published on Imperica here]

So, you walk into a room full of the brightest and best that agencyland has to offer, a collection of the digitally-enthused and passionately adept, charged out by their agencies for hundreds, even thousands of pounds a day, all in a room to share knowledge and swap best practices.

And then you realise that there’s a surprising common factor – a lot of them appear to be dumb.

The clue comes from the presentations; one is essentially a series of links, as if a bunch of digital heads don’t have any other way of sharing such things, as if Twitter, Stumbleupon, Reddit and, y’know, email groups never existed. Another presentation lays out the revelation that stories have – I kid you not – a beginning, middle and end. This revelation causes much scribbling of notes, swiping of iPads and, yes, even tweeting. I look around me and think: is this it? A stone’s throw from “Silicon Roundabout”, the much-vaunted (by politicians, anyway) digital tech hub of London, where all the cool smartarses should be and it’s just… not San Francisco.

This is only one of a number of occasions recently when I’ve looked at agency staff doing, y’know, stuff and thought “Why do you exist?”

Account team to the rescue

Why do clients hire agencies anyway? Why, if you run a business and employ staff, do you need to bring in an external company to do bits of your business? The answer is that agencies are supposed to be better at certain things than you are. You hire in specialists to do work that can’t be completed internally to the same standards. Simple, right?

At least, that’s how it should be. Digital has been like this for a while – once the preserve of unemployable nerds, later the territory of the whizzkids and geniuses, but always an area where clients were lacking in knowledge and / or experience. Why? Well, often, it was an age thing. Marketing directors and other senior stakeholders were of an age where they hadn’t grown up with the internet and weren’t enthused about it. 10 years ago, people were still debating whether or not they should even have a webpage (mind you, a couple of weeks ago, a large client of mine was still debating whether or not to have a Facebook page. Sometimes things don’t change). Agencies who needed to sell these services found the employable geeks and snapped them up on far better wages than yet-to-be-convinced-of-the-value-of-digital clients. They gave the unknowledgeable the option to buy a service with a set of deliverables attached; if you don’t understand what the work is really about, having a checklist of documents to be produced and webpages to be constructed allowed you to tick things off one by one, and assume you’d done your job.

And then people started to make money out of the web, and things changed again.

Suddenly, this stuff was deemed measurable in metrics normal non-digital people could understand. Did we make a return on our investment? Are we selling things through our website? The demands on agencies changed – and agencies changed to meet those demands. Instead of “digital strategy” meaning “what colour should our website be?” it became “does our web stuff help meet our business objectives?” and so new kinds of planners and strategists were needed, ones that understood the workings of businesses more than just the workings of marketing.

At this point, the advertising agencies who had successfully sold in the notion that the web was just another billboard, somewhere to extend the “above the line” creative, a place to put pretty pictures from the real world in front of consumers (just in smaller boxes)… they began to look, well, a bit shit.

Digital engagement is not like advertising – there is very little value in engagement alone. Whilst you may get a bit of all the above-mentioned metrics, if you don’t give an end user something to do you’re missing an opportunity – that might be the opportunity to engage in conversation (two way communication breeds better engagement than just getting people to watch a film or an animation or read some text), or it might be to drive people to a web or social media page with a stronger call to action, to sign up, to contribute, to purchase. But it’s not just that it’s an “opportunity” – it’s that these are things people want to do online. Passive viewing and sucking up marketing doesn’t cut it. And this kind of activity is more measurable than “how many eyes walked past our poster.” Analytics will tell you exactly what response something got.

And then there’s the user. Digital requires more understanding of individual users’ needs because people do more things in digital than, say, when they’re walking past a poster or watching the telly. They search, they research, they talk with friends about things they like, they shout at brands they hate, they create and distribute, influence and are influenced. And they often do it by themselves in a room with a screen. Advertising & PR have to talk “one to many” – so advertising a product on TV to millions in the hope you hit 2 or 3 target markets means finding messaging that works across all targets; digital has an element of the same but often requires a more individual approach, understanding that it’s just you and the user communicating, albeit in a context of more people / friends / followers etc.

"Yeah, sorry, gotta dash, got a client meeting in 20 minutes, gonna sell them some elephants."

This puts the ball in the court of the strategists. Where great advertising planners of the past were often a mixture of creative instinct, sharp minds and bucketloads of experience, digital planners and strategists need a mix of those things plus one all important element: evidence. That means that you can prove what you say; charm and a few lunches might sell something in to the client, but it won’t sell it into the punter. Smart agencies now buy into psychology, anthropology, data and research. And strategists & planners need to be able to help turn all of that into yer actual real stuff on the other end.

For a while, digital people looked pretty smart, then. The explosion of social media brought a new generation of socially-minded people who got lumped together under the “digital” banner and then… Well, I’m not sure the two are wholly related but there seems some correlation, if not causation. Social media seems much more sexy than “trad” digital because, hey! Everyone’s got a Facebook page and – bejasus! Some people have even tried that Twittering thing and it looks fun and so can’t we have one of those? Can we make it sell our widgets? … and so forth.

The less you know about a subject, the harder it is to be strategic. One of the stupidest mistakes of people in positions of “authoritah” is to assume that any job they’ve never done themselves is actually easy. Now they had a Facebook page, they were social media experts, right? Which is a bit like saying you read a paper every day so you know how to be a journalist. Marketing directors would start looking at social as a way of delivering campaign tactics – short term, marketing objective-driven executions; and the new generation of social media agencies have got fat off the proceeds. It was the Wild West all over again, and without much in the way of competition the fees were high and the audience easier to reach. There’s gold in them thar hills, and all that.

Now, things are different: everyone’s doing it. It’s harder to win. Real social engagement means a sustained presence; listening and responding goes further than just communicating – consumers expect companies to change when they demand it, and in the age of social CRM, they do. Marks & Spencer are brilliant at this and they run most of their social engagement from a small in-house team who know what they are doing. Who the hell needs an agency, when you’re the most-engaged UK brand on Facebook and you’re driving sales?

Proper strategy means knowing what businesses need as well as consumers – and over time, not just in the short term. Relationships mature, they aren’t always created in an instant. Knowing the whizziest of whizzy gadgets and gimmicks is not the whole game any more – but it is a part of it. If you stop learning every day, technology-based disciplines will always pass you by. This is the technological imperative at work – just because you know something about Twitter today does not mean you can answer business challenges tomorrow.

All this “smart, experienced people” schtick flew in the face of standard agency hiring practices. Agencies weren’t where a lot of smart people went, not outside of planning departments anyway. If you had a modicum of charm were good looking and had a nice haircut, wore the right clothes and kissed the right sphincter, you could get a pretty decent job. Smart people went into planning and strategy and were locked away in dark rooms. At this point, I expect a lot of agency types to be fuming, but, frankly, if they read this far they aren’t the targets (reading seems to be anathema to a certain type of agency person, long copy a distant dream). Anyway, the needs of the digital market brought in smarter people. Agencies who had never considered such things as, y’know, how a business actually works, started to employ business analysts and consultants, whole departments sprang up that dealt with data and research. Anthropology, sociology and psychology became important.

So, what’s with all the agency dumb?

My theory: money breeds complacency. And complacency breeds poor hiring practices. The lack of competitive pressure which has allowed a whole slew of agencies to gain cashflow on the back of average work. So they keep hiring the same people they always have. They forget – or don’t know how – to look into social and digital expertise. In the ’90s you used to have to check that someone had “Microsoft Office” in their skillset; now kids learn that stuff in school. Just because someone has a Pinterest account it doesn’t follow that they know how to use it for business (and for an explanation of why social media consulting is almost dead for the same reason, see here). And if you don’t use it yourself, you sure as hell can’t check whether someone else is any good at it.

I keep wondering what it would be like if you got into a car for your first driving lesson and the instructor had a book open on his lap. “I don’t drive myself,” he says, “but I have an excellent book here written by some of the best drivers in the world. Now…. If you can…” [reads from book] “depress the clutch with your left foot…”

You would be out of that car in a second.

"Where to guvnor? Can you just put me 'and on the satnav? Cheers."

So why do agencies think it’s alright to charge people for the services of people who are reading from the approved text?

The trouble is, they all follow a similar trajectory. That complacency allows their competitors to nip in and point out that they could deliver the same work (a) considerably better and (b) considerably cheaper. Non-experienced people take longer to do the same work and they’re learning as they go – inevitably costs go up as quality suffers.

Agencies that want to prosper with digital and social offerings need to get their heads out of their collective backsides. Compete with Silicon Valley?

You. Are. Fucking. Joking.

 

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Pinterest & Canvas: Sharing Made Easy

Funny, whilst Google Plus and Facebook are the media darlings duking it out for supposed primacy in mainstream social networking, there’s a few newish sites that are doing good work and with significantly less attention. I think they do a better job of sharing (to a point) than the two great behemoths as they’re more focused on the things human beings actually want / do. I’m going to highlight Canvas and Pinterest because I think they are two sides of a coin; the latter aimed at more of a mass audience and the former at the meme-loving hordes with a bit of a creative bent.

Sardonic sneering: implied.

First, Pinterest. Simple version: it’s a way of saving webpages you’ve visited.

Saving webpages: very easy, thanks.

I’ve used a variety of sites / applications for this kind of thing over the years. Delicious was my original place, but its links to Yahoo! always made it clunky and you’d often find yourself logged out and needing to remember passwords etc. But it worked, so it was good. Later came Evernote, which mixed the simple link-saving with some visual “clippings” of the webpage to remind you what it looked like, etc. As I started to post more and more to Twitter I found myself mentally relying on the fact I’d tweeted as a “store” of my links… only to realise that searching tweets was annoyingly tricky sometimes – and then Trunkly came along. All you had to do was log in with Twitter and there were all your links you’d posted, neatly searchable. And then Delicious bought Trunkly and they’re about to turn it off whilst they integrate it into Delicious. And that felt like a step backward. I want “simple” – push button, everything happily stored. So I took a look at a friend’s recommendation: Pinterest.

Pinterest lets you save webpages as collections of thumbnails with a short description. Example. You can create a board about anything. In the “About” tab you’ll see “Pin It Button” – go there, drag it onto your links bar, then every time you’re on a webpage you want to save, you just hit the button. It’ll ask you which board you want to put it on, then you can add an image from the page and a description (tip: highlight text on the page and it’ll automatically add it as the description, so no additional typing required). And that’s it.

I love the simplicity. If you see an entry posted by someone that you like, you can “like” it, share it, follow that particular board. Whilst you can follow people, the chances are you aren’t interested in everything they are; perhaps you share just one common interest – so you follow the board not the person.

When you consider the relative complexity of Google’s Circles in Google Plus – and the amount of time it takes to administer it all Pinterest beats it hands down. I save content because I want to – if anyone wants to share it with me then that’s fine, but because my primary behaviour is “I want to save this” not “I want to display this” or “I want to draw attention to (or market) this” it just feels much more intuitive.

In the last week I have watched as the activity levels have shot up. Somewhat unbelievably, Alexa ranks Pinterest at #34 in the US traffic rankings – considering it’s still in beta and you need to request an invite, that’s… astounding. And it’s not just the stereotypically male, geeky early-adopter types; there’s a real spread of gender and age in the people I’m seeing, far more than Google Plus has managed to date.

If you’re interested, here’s me btw.

Onto Canvas, then. This is also a site about sharing, but it also adds a couple of neat elements: (primarily) visual conversations and the ability to create content easily. I’ve long been a fan of the likes of 4Chan and B3ta,

It's still rude, but not as rude as 4Chan

image boards that allow users to post Photoshopped images, animated gifs and other links – and with a streak of free-minded, anti-censorship liberty thrown in. Both are beautifully NSFW, 4Chan markedly more so than B3ta. Both are chock-full of laughs, mind, if your brain is wired that way. They are probably my two favourite sites which have lasted over the years. Which says a lot, probably.

Why is Canvas a leap forward? Because in the 8+ years I’ve been on both I’ve hardly posted any images. I’m laughing, but I’m also in awe of the Photoshop / other tech skills involved. I don’t have the chops, so I “lurk” rather than create. You may have heard of the  “1% rule” that says that only 1% of people are regular creators of content and this certainly applied to me with these sites. But Canvas (which, by the way, was created by Chris Poole aka “Moot” who created 4Chan) makes it easy – if you see an image, you’re encouraged to “remix” it. Hitting that button opens up an image editor with brushes, text editors and more that even I can use. And suddenly, I have started creating more. It’s just what you want if you love “meme” culture and want to get involved. And unlike sites like memegenerator.net – which has its charms – it has a much more conversational flow to the content and the way things are posted.

But that’s not the whole picture. “Liking” content is done through “stickering” – you drag a sticker onto the image you like. And there’s different stickers for different emotions – the traditional “LOL,” a shocked face, a “wise words” sticker, and more. The more time you spend on the site the more stickers you get access to.

There's more to life than "Like"

Finding images you liked is easy, too, as you just have to go to the “stickered by you” page and everything you liked is saved there.

And this, frankly, is better than Facebook “Like.” Liking is fine, but it’s too simplistic. I don’t “Like” my friend’s status saying that they’re having a rough time; I may LOVE a particular picture; I might be inspired by a comment. But it’s all just “Like” and that just isn’t human enough. I want to comment without (always) having to write something; sometimes you just need to smile or grimace at someone, give them a pat on the back or a roguish slap on the cheek. Humans interact through expression as much as through words; Canvas gets this.

So, two entirely different sites but with a common theme: they understand your social behaviour better than the two giants that we all talk about constantly. Neither are anything like “Facebook Killers” (stupid idea) – they’re just healthy additions to online life. And Google Plus seems to be doing a good job of killing itself with no outside assistance.

Anyway, these two sites appear to have done more to enable the truly human sides of sharing that either of the giants in recent times. “Like” is too simplistic; Circles is too complicated and time-consuming. Enabling human behaviour is at the heart of what makes a good social site and these two do it in spades. Enjoy.

 

 

 

PS No, I’m not going to link to my stuff on Canvas ‘cos it’s rude.

 
1 Comment

Posted by on January 17, 2012 in Communities, Digital, Social Media

 

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Why The Entertainment Industry Is Wrong About Everything Pt. 1

The coming of the digital age should have been a golden era for entertainment and, for some, it was: Amazon, Facebook and others appeared from nothing to conquer the world in a few short years. But for others? A darkness descended on the giants of old… Major music labels, broadcasters, production behemoths, newspapers, games manufacturers – their revenues plummeted whilst demand for their products actually increased.

"It's all about a long-term vision."

And there was one reason, above all, for all their misery; one thing that set them apart from other industries that had reaped the golden benefits of the digital age: these giants were – and often still are – steered by people whose idea of proficiency in ‘digital’  languishes somewhere around the Casio watch on their wrist. These are people who have never really used the things they are meant to be mastering, people who are simply not equipped for the job.

This series of articles will attempt to explain why, as a result, the entertainment industry is wrong about (just about) everything.

The first thing to do is shoot down a few myths that are repeated in every sector – enduring myths that, through their luscious soundbitey-ness, have become conventional wisdom. These mythical narratives are harmful because they are so cognitively appealing that they have become the whole debate:

  • You can’t expect to get anything for free
  • Piracy is theft, like stealing from a shop: aka “You wouldn’t download a car”
  • Piracy does only harm for artists and other content owners
  • Illegal downloads = lost revenue
  • Once people taste ‘free’ they never go back to ‘paid’
  • Telling people about piracy in a ‘zero-tolerance’ fashion is the only way to stop it

1. “You can’t expect to get anything for free”

Proponents of the age-old adage that ‘there’s no such thing as a free lunch’ point towards a truism: everything has a price. They are generally correct. But the mistake is to believe that the ‘price’ is always a directly or solely financial one.

We have many examples of every day consumption that – if not wholly free – are ‘free’ to use on a daily basis. We may pay a yearly licence fee for TV in the UK but (a) it’s only about £14 a month – compared to, say, upwards of £50 a month for Sky – so seems relatively insignificant to most people and includes payments for the whole BBC including radio, but more importantly it’s (b) not something you physically pay for on a daily basis.

Behavioural economists will tell you that because you aren’t paying for it there and then, it doesn’t feel like you’re paying. It doesn’t cost you any more to turn the telly on five times a day than it does to turn it on once.

Commercial terrestrial TV is a good example because it feels free. But it isn’t. In fact, commercial television relies on free viewers as advertising revenues depend on the size of the audience. The more people who watch, the bigger the fees advertisers pay. I can watch premium content on ITV – say Champions League football – and the cost to me has been subsidised by advertisers. If I watch a newly released film on Channel 4, it will have been subsidised (usually) by a sponsor who pays for a whole season of films, plus the advertisers who pay for slots in the middle of the film. The cost to me is that I don’t get to watch the film uninterrupted – I have to wait for the ads. If I want, I can buy the DVD or watch on a premium subscription channel and then I can have an uninterrupted viewing experience.

In other words, I pay a price but it isn’t directly financial.

The business plans of the broadcasters don’t depend on me paying them money, they depend on me watching. For free. It’s basic economics of supply and demand – the cheaper the price, the more people will watch. The more people watch, the more the advertisers have to pay them. This is true of radio, it’s true of websites like YouTube and Google, it’s true of me taking surveys to get free access to eConsultancy market reports. These things seem free to us, but our exposure to advertising is the price we pay.

So, the idea that ‘free’ is wrong is… wrong.

It’s vital.

2. Piracy is theft, like stealing from a shop: aka “You wouldn’t download a car”

Erm, no. If I steal a car, the owner of the car is deprived of it and cannot sell it to someone else to realise its value. If I download a song, the owner of that song can still sell it again. And again and again. It does not disappear from their repertoire. If I watch a film on terrestrial television it is the same: I do not deprive that film owner of the ability to sell it again. Digital products just don’t behave the same way as physical products.

You think people like visiting showrooms and being attacked by sharks with moustaches and cheap suits?

The fact is, for a lot of people the free downloading is similar to the behaviour in listening to something on the radio: a free – and thus slightly crappier – experience than the paid-for version. I don’t really like mp3s because I like hearing things at a certain quality that mp3s don’t deliver. I listen to digital music on the daily commute because even I’m not quite enough of a Luddite to use a CD Discman. But the things I love, I buy on CD because the quality is better. Some things I prefer to buy on vinyl (old punk and  reggae for example) because they were made for the format and digital doesn’t improve the sound. Not only has the entertainment industry missed out on realising the difference between ‘lost revenue’ and ‘lost opportunities’ but they’ve failed to recognise the value of the digital product – and priced it accordingly.

Simply, digital is, for many things, a worse experience with far cheaper distribution overheads – pricing it at the same level as the physical (or not significantly less) just overvalues the inventory. If you could download a car right now, it would be made of paper and need to be powered by wind and pedal-power.

3. Piracy does only harm to artists to and content owners

Ha. Funny thing – the most downloaded stuff is often also the stuff that sells the most. Which comes first, the chicken or the egg?

Back in the very early 90s, before the internet was something people had at home much, I had Sky. I loved the Simpsons. All my friends thought it was for kids and I was loving the subversive humour and telling people they were wrong. Some people came round on a Sunday and would get sucked into the couch with a bag of weed or a beer and it would click. But I was obsessional – I used to record Simpsons VHS tapes on long play, which means eight hours of continuousSpringfield. I did this mainly for myself and my housemates as Sky only broadcast two episodes on a Sunday back then.

But over time, once I had sufficient stock, a trusted friend would be given a tape to enjoy at their leisure – and they would show it to their housemates. Over time, they too would become infected Homerphiles and so forth. As Sky’s broadcasting of episodes increased, so did my taping. People used to beg to be allowed to borrow the tapes. I can confidently state that hundreds of people in the Hyde Park area ofLeedsin 1991-94 were converted to the show through my piracy. And back then, we all spent money on the show too – not only did we watch the show on Sky and thus had a part in improved viewing figures / ad revenues, but we all had t-shirts, pens, stupid bathroom kits, caps, whatever. When my mother found out I liked the Simpsons, that took care of 10 years of Christmas presents: alarm clock, sponge, shower radio (yes, what of it?), bubble bath, greetings cards. Endless revenue. Multiply that by the 100s influenced by those pirated tapes. How’s that working out?

Years of lucrative brand engagement, thanks very much

And it wasn’t just those shows. Over the years, the sharing of pirated material amongst my group of friends that has led to people being converted to fans has included Futurama, The Wire, Treme, Family Guy, South Park, American Dad, Fringe, Medium (only the girls, obv.), Lost… just about every major show that hadn’t yet made it to the UK. And those people talked about those shows, became part of the groundswell of opinion that eventually influenced UK TV stations in their choices of imports (NB a lot of those shows were picked up much later than, say, The Sopranos or Game of Thrones).

Piracy can be pure promotion for some entertainment. We used to license records for release in Russia knowing full well that Russian rip-offs would appear in nanoseconds (official sales used to number in the dozens but they’d be in every shop in every city a week later), but the artists used to make money from touring and we’d share the revenue from tour receipts and merchandise. Good days. If you didn’t have pirated material ordinary Russians couldn’t afford your stuff, nobody knew who you were.

Recently a pirated PDF of a children’s book parody called ‘Go The Fuck To Sleep’ was sent round by every parent I know. What happened to the poor unknown title / author? They went to number one on Amazon.

And whenever there’s a study that shows the beneficial effects of piracy, it’s suppressed by lawyers and lobbyists for trade organisations whose narratives are not served by the idea that, say, people who pirate movies are also those most likely to treat it like an extended preview / tester for things they go on to buy.

I have discovered hundreds of games, movies, TV shows and bands from having a pirated copy that I then go on to buy. I know dozens of people like me. I meet hundreds of people like me online. I can see empirical research that supports this notion. So why are the people who could most profit from this knowledge also the people who are shouting loudest against it?

Because they are just not that bright.

4. Illegal downloads = lost revenue

Now, let’s be clear – there is a difference between making the above point and advocating that piracy has no harmful effects and doesn’t deprive – in some cases – people of rightful income. It does, and especially with smaller independent artists and copyright owners who don’t get to make the revenue up from other sources as much as the big guys.

But this argument is often used to back up the idea that piracy costs an entertainment sector £X billion a year and so forth.

This is a crude fallacy.

Supply and Demand is one of the basic elements of a free market and is lesson #1 in high school economics. If the price of something is too high, there will be lots of people willing to sell it (supply) but fewer people will want to buy it because it’s too expensive (demand); if the price is too low, there will be lots of potential buyers but fewer people will want to sell it at that low price. The smart move is to price your product just right, so that lots of people will want to buy it but it’s also profitable to produce. In other words, moving the price up and down affects demand for a product. See the graph below:

It's the economics, stupid

What the entertainment industry does is look at the demand for illegal downloads and put a price on it on a per-download basis – the price in the marketplace today. But those downloads are actually priced at ‘free’ – which explains why the demand is so high. If, in fact, the cost of getting that download was the market price, there would not be so many downloads. This is so basic that it makes me want to cry that anyone can have the gall to stand there and tell me that the lost revenue calculated this way is a real figure. It isn’t. It’s not even close.

This MPAA pdf is a good example. It twists the data to fit a point of view but has very little basis in reality – you cannot “lose” sales that would never have happened. This is not to say that there wouldn’t have been some losses – of course there are.

If the price had been 10p a movie download, and it was delivered easily, in an agreeable format and quality, you might have seen, say (just for example), 85% of those people choose the legal option. Had they done that, the legal income on the 5 billion or so movies it takes to make up their “illegal download” figures would be around $500 million. And suddenly all their maths-based hyperbole falls to bits.

This whole approach is unfit for purpose. And that’s not all. I don’t agree with him on a lot of his conclusions but Lawrence Lessig put his finger on the discrepancy between perception and reality as long ago as 2004:

“In 2002, the RIAA reported that CD sales had fallen by 8.9 percent, from 882 million to 803 million units; revenues fell 6.7 percent. This confirms a trend over the past few years. The RIAA blames Internet piracy for the trend, though there are many other causes that could account for this drop. SoundScan, for example, reports a more than 20 percent drop in the number of CDs released since 1999.

“That no doubt accounts for some of the decrease in sales… But let’s assume the RIAA is right, and all of the decline in CD sales is because of Internet sharing. Here’s the rub: In the same period that the RIAA estimates that 803 million CDs were sold, the RIAA estimates that 2.1 billion CDs were downloaded for free. Thus, although 2.6 times the total number of CDs sold were downloaded for free, sales revenue fell by just 6.7 percent… [So] there is a huge difference between downloading a song and stealing a CD.”

And that, as they say, is that. Yes, there are losses, but they are way smaller – and have way less effect – than we are being led to believe.

5. But once people have had it for free, they won’t pay for stuff right?

Wrong… so very, very wrong.

I used to hear this a lot in the music industry. In 1999 you should have heard the screaming. For a while the mantra was “once music has been free, people will never pay for it again.” And then, within a couple of years, there was iTunes.

iTunes gave people what they wanted in a format they accepted at a price they deemed reasonable. And if my memory serves me well it did OK, no?

Supply and demand tells you this – the price may be free, but everything from quality to ease of finding something to format is not well-served by ‘free’. iTunes does it better and punters buy it because of it.

The presumption is that people download illegally because they are either fundamentally criminal or simply don’t understand that content has a value. There may be a little truth in either point, but I’m going to let you into a secret : the real truth is that the vast majority of people download stuff because they want it.

And whoever makes it easiest for them will win. People pay a price for ‘easy’ – understanding demand helps you define “easy” and the basics of supply and demand should tell you what the price is.

"OK, but first we need to sue you."

6. The only response is “zero-tolerance” enforcement

Yeah, hard to believe this was a joke sometimes.

The funny thing about that Onion article is that in the 1920s and 1930s record companies got drawn into lawsuits against radio stations as artists feared they were being robbed of both record sales and performance income (they thought if people had radio they wouldn’t pay to see live performances. Here’s a good tale from 1935.

The problem is that the enforcement approach starts from a very bad premise: criminalising your potential customer base. If you want people to buy your stuff (which includes, by the way, your PR) then I’d suggest threatening is not a very effective of communication. Even if wholly justified you are going to become the bad guy when you sue a dead grandmother, a homeless man or a 10 year old girl with a disabled mother.  Most companies seem to hold the idea that they should be good guys with something valuable to offer to a consumer and would shy away from such confrontations – especially when the net benefit is, at best, a pyrrhic victory.

Once again, this is a failure to understand the nature of the market and its consumers. People take stuff because they can – and the legal options just aren’t as appealing in terms of price (yes, obviously), format, ease of search / discovery etc., i.e. ‘demand’. Reducing the demand for illegal content is not just about stopping the illegal stuff – it’s about increasing the demand for legal content. And if Apple can do it, why can’t these other companies? That’s right: because they’re idiots.

In the book Freakonomics, Levitt and Dubner (who seem to enjoy nothing more than poking economists’ bee hives with big pointy sticks and, frankly, good for them) tell the story of Paul, the Bagel man. He spent years selling bagels by dropping off a load at office parks around Washington, relying on the honours system for payment (i.e. you take a bagel, you drop your money in a collection tin). Crazy, right? Actually, no. It worked damned well. And better still, because he did it for so many offices over 20+ years, and kept meticulous records, he performed a huge economic experiment. 20+ years of empirical data about honesty. How cool is that?

In fact, he found that honesty rates never really varied much (there were some small local variations related to things like local unemployment etc) – the overriding statistical conclusion is that between 87% and 89% of people are honest. Eleven per cent of people are always going to screw you over and there’s nothing much that changes that. I can’t recommend reading the article highly enough.

So tell me – why concentrate all those resources on trying to identify and punish the 11%, taking down a significant proportion of sympathetic defendants from the other 89%? Why not use those resources to improve the service and supply to the 89%? For most entertainment sectors, i can’t see how it’s in any way a a controversial suggestion to say that if they serviced demand properly they would make more money from the honest majority.

In the UK, it’s difficult to estimate how much is spent on copyright enforcement every year but there are some expensive-looking offices and lawyers dedicated to it. There’s also talk of ISPs being asked to fund 25% of such costs – and that’s estimated at up to £500m in costs to the consumer (when the ISPs pass on the costs, which they will). That’s a lot of enforcement going on.

Sounds a bit like The War On Drugs to me. And that’s an unqualified success, right?

Enforcement doesn’t stop criminality in copyright any more than it stops criminality in the real world. It competes with demand, which will always be strong – people love music and don’t want to be kept apart from it. Fear of punishment isn’t as strong a method as convincing people of why you should buy legal. You can carp on about supporting artists, but when these messages come from companies with as much of a record of ruination and interference with artists as success, well, it just doesn’t ring true. These captains of industry, when at a different dinner engagement, will tell people that it’s the market which has the greatest effect on consumer behaviour – so why do they maintain the myth that enforcement can work?

That’s right: they’re idiots.

This is only the tip of the iceberg. But the pattern is clear – actions are based on prejudices and presuppositions rather than evidence or simple market economics – in some cases undue influence on market forces is preventing innovation that may yet become profitable. People who are not qualified to do their jobs often use other people’s opinions to guide their decision-making process, but that isn’t working for large swathes of the entertainment industry because the same personnel have now been institutionalised to believe myths about piracy instead of engendering good business practice.

Instead of digital heralding the golden age for the entertainment industry, it’s become a golden age for entertainment industry lawyers.

In other words, there’s too many people that work in the entertainment industry that are wrong about everything.

To be continued.

 

Next in the series: how they’re messing up sport on telly.

 

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The Nonsense of The Personal Brand

I get a lot of gip about my Twitter account. I swear, make bad and often off-colour jokes, troll major brands and social media consultants for kicks and generally refuse to play the “game.” Considering a history of working in marketing and dealing with brand and PR, am I just killing my personal brand?

AKA "I am a massive bell-end."

I certainly hope so.

Consider what personal branding is all about – the idea that you need to maintain a professional demeanour in the face of present or potential clients or networking colleagues. Sadly, there are plenty of examples of employees losing jobs over their social network postings and employers who “vet” potential employees using companies that perform online vetting.

The idea that your personal life now belongs to your employer is unbelievably offensive in what is supposed to be a “free” country. Sure, if you attend a Klan rally wearing your McDonalds uniform people are bound to get upset – you can’t blame the Klan for excluding you.* If you’re wearing a uniform then it’s not such a stretch to think that you represent your employer somehow, but if you’re in civvies on your own time? Would you expect your employer to see you dancing badly on a Saturday night and give you a written warning about your conduct? What if you worked for Amnesty but liked to secretly read the Mail On Sunday? Or you worked at T-Mobile but had a BT landline? What business is it of anyone’s?

The answer to all of this is pretty simple. If you’re worried your employer may be social network-sensitive, don’t allow them to connect to you and sort out your privacy settings. For some people, this is sadly a reality – but they are a slightly different issue to those with “personal brands.”

The person as a brand is not a new concept. And, if you’re famous like Donald Trump then I suppose I can see the sense in it – your income is related directly to people’s perception of you. So, even if it makes you a total douche, fair enough. But that isn’t most people. Most people who go down this route are creating a

"Hi. I'm a self-perpetuating media node."

professional façade for their personality – this is what your CV or LinkedIn are for, a professional interpretation of who you are. But your presence in social networks is social by definition – why are you pretending to be someone you aren’t?

The process of branding is often about making products seem more human or human-friendly – so why is that process being applied to, erm, humans? Would you ever want to meet a personal brand? How does that go? “Hi, I’m Tom. Have you read this week’s iPhone news? If you’ve enjoyed this conversation you can find me at the bar across the street later where I’ll be discussing the Wall Street protests…”

“Uh-huh….  Check please.”

I don’t subscribe to this kind of stuff because I’d rather people knew what a jerk I am before they employ me. What’s the point of pretending to be someone I’m not? They’ll find out eventually. I wouldn’t lie on my CV and say I can operate a crane, only later to destroy a building with one and sheepishly ask if I’ll be getting paid for the hours I’d done before those unfortunate deaths. The same goes for clients. If clients are sensitive, ensure they are not connected. It’s the work account that needs to be careful not the personal ones. If you’re a massively offensive and profane person, your company is unlikely to place you in a room with sensitive clients so why would you connect  with them on social networks?

Most client organisations are made up of human beings just like you. And they don’t care about what you do in your personal life. They are more likely to be offended if you pretend to be someone you aren’t and then they discover the real you. If you spend your whole life with a permagrin, soray tan, fake Rolex or Gucci handbag slapped on your person, good luck to you. But you can buy your own drinks.

Branding? It’s for companies and cattle. You aren’t a brand, you’re a person. Maybe try actually being one.

It's the mark that says "Hi, I'm Chad, let's talk about articles I read on Mashable."

*Zzzzzzing.

 
4 Comments

Posted by on October 16, 2011 in Branding, Marketing, Social Media

 

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Social Media Consultants: A Cautionary Tale From History

Are you sitting comfortably? Then I’ll begin… Once upon a time a man called Alexander Graham Bell invented the telephone. It was 1876 and blah blah blah yadda yadda yadda. That’s not the interesting bit. What’s interesting is that Bell himself, despite predicting the immense social consequences, never owned one at home.

The reason was generational: having grown up with nothing more than telegraphs and morse code to communicate further afield than the next town, the need for these new forms of communications had not really touched his own life. He just didn’t feel the need.

In 1878, the first switchboard opened in Connecticut. It was staffed – as were many of the first exchanges by young men (average age 17, apparently). This was because they had the stereotypically “male” trait of being able to look at these complex devices and be able to work them without lengthy training. By 1880, there was one phone for every thousand American households. By the mid-1890s, that number had dropped to one in 70.

Most interesting to me was that, at this point in history, these expensive machines were not for fun – they were treated like a telegraph machine with a little more functionality. You didn’t chit chat, you didn’t top and tail your conversation with pleasantries, you just verbally expressed what you would have sent by telegraph. People would pick up the phone and say “Need 17 cases STOP Delivery by Wednesday STOP Price as previous order STOP.” And put the phone down.

By the 1920s, the machines were more ubiquitous and the companies that sold them were trying to get people to use them as more social devices. AT&T’s legendary “Reach Out & Touch Someone” came from a realisation that the families and friendships that had been scattered by America’s still-recent migration could be reconnected using the phone. This marked a change in direction, although it was one that businesses had already realised, as they networked a series of offices across the country and even the world. Using the phones was big business, but people just hadn’t grown up with them so they needed help.

An industry grew to help these businesses. This is a film from 1927 (it has no sound, sound hadn’t been invented then and I believe people mostly mimed to each other in the street [CITATION NEEDED]).

Around this time, the switchboards were getting rid of those young boys who had ruled that particular roost. With competition raging between Bell Telephone, AT&T and Western Union (the latter merging under the same president, Theodore Vail, who was related to the one of the people who developed the first telegraph and was such a stickler for centralised power that Vailism became a byword for monopoly practices) there was a move towards service as a feature rather than mere functionality. Owners found that the boys were often rude, made short answers and were unhelpful – another stereotypically male trait, unfortunately. This is why, by the time cameras got around to capturing them, most of these switchboards were operated by women – they were simply more pleasant to talk to than their spotty teenaged male counterparts.

If you look closely there's a smug guy saying "Plug it in there and say "Hello, sir.""

There must also have been a change in the employees that were taken on. By the mid-20s, many would have had experience in using a telephone at home and would have been more comfortable with the conventions surrounding its use. And training would have become less of a specialty – these operations would have become focused over time less on how to talk on the telephone and more about how to monetise operations off the back of them. Think of terms used in callcentres today and it’s all cross-sell and up-sell. You would imagine that the training around saying “Hello, welcome to Acme, my name is Allan, how may I help you today?” would be a short side note. The real meat of training is how to sell, how to serve, how to make sure the customer leaves happy and with a lighter wallet.

And so it is – and will be – with social media. It seems odd to me that this is even something worth mentioning in 2012, but I was reminded of the need by an idiotic spat with a “social media consultant” over their use of hashtags to hijack news items and conversations. I’ll save the details for now, but it occurred to me that these snake-oil salesmen are still out there relieving businesses of budgets for nothing more than, effectively, learning how to speak to people in these channels.

This was social media strategy for most of us in about 2005. Since then, it’s become more about how to integrate this new channel into business operations. With the advent of “social CRM” (yes, I know, but it doesn’t have to be complicated, it can really be distilled into listening to what your customer wants and then working out how your company can service their demands and needs), there is an even greater push to get brands and organisations engaging, listening and responding operationally.

But this is not where the social media consultant lives. They still think that their ability to chat on the phone sets them apart as specially talented, that brands haven’t yet caught on, that the need to impart wisdom gleaned from sometimes as much as two years’ experience as a self-appointed consultant qualifies them as a business requirement. But every year that passes, another generation of young employees comes to a company and for them social media is not something special – it just “is.” They’ve grown up with these things, it’s natural to them, they don’t need training in how to use it; they need training in how businesses work so they can work out how social media becomes as much a part of everyday company life as it is for the next generation of consumers coming through. Communication skills are easy to teach; how to run a business is not.

Snake Oil - check out that ROI!

The social media consultant should be dead by now, but they aren’t. They use each other to bolster their follower accounts, content farming like crazy to set out nets to catch each other with, giving the impression of huge networks that are bolstered by pointlessly-inflated Klout scores, but despite dropping phrases like ROI into their copy they offer very little of real worth to anyone that has learned to use their new version of the telephone. In an age when social media should be moving people towards transparency, they are skilled at setting up false impressions that easily impress the last few clients on the block not savvy enough to see through it. In this respect, they have another historical counterpart – the snake oil salesman, the guy that used to ride into wild west towns, sell everyone a magic cure based on miraculous results witnessed by the crowd when some poor miscreant (who also happened to be a stooge) would suddenly be “cured.” Then they’d ride off to the next town before the last one discovered this stuff had done nothing at all or, worse, poisoned them. Often, the placebo effect would make people believe they had actually gained relief, so those salesmen knew which towns they could visit again and which ones would lynch them if they ever set foot in the place.

A couple of years ago, I saw the video below. It made me laugh so much that I immediately removed from any of my copy any kind of terminology that seemed to imply social media guru credentials. I (honestly!) wasn’t in the same game but I knew plenty who were and it seemed like a red flag, a warning not to be lumped in with this kind of behaviour. I watched it again. And what made me laugh more than anything was the thought that with 2012 just around the corner, it’s still relevant – unbelievably so.

To anyone that might consider employing one of these chumps, I beg you – ask why you need them. Again, this feels like a five year old issue, but it clearly needs restating. Ask why you need “social media” and be clear what exactly your company can use it for. Treat it like any other channel and apply some meaningful metrics. Your telephone is connected to – potentially – billions of people, but just because it has that potential connection doesn’t mean you are actually connected.

That connection depends on whether or not your business has anything they want. Without that, your Twitter follower count means precisely dick-all. If you have the kind of business that needs it, there are specialist call centre companies which can help with outsourcing. They work because they are well-trained, understand your business requirements and deliver against them. Outsourcing social media should mean nothing less, but it often does.

Whilst “social media strategy” used to mean “how to talk to customers through social media” it is now about the more complex relationships involved between organisations and their customers, including collaboration and co-creation and how to integrate what is created into business operations that run a profit. Social strategy is a part of digital strategy is a part of business and marketing strategy. It’s all inextricably linked. Stop being impressed by surface impressions and ask more questions about what this stuff does for you. Stop drinking the snake oil.

Like the boys who once ruled the switchboard roost, or the maker of the instructional film, the social media consultant will one day be consigned to a minor footnote in history, notable only as a passing interest that “huh, we once used to need people to tell us how to use this stuff.”

Huh. How about that?

 
5 Comments

Posted by on October 10, 2011 in Digital, Marketing, Social Media, Society

 

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